IMF member countries and other jurisdictions wishing to bring their legislation up to the norms and standards established by the international community in the area of combating the financing of terrorism face a number of choices. The sources of these norms and standards range from legally binding international norms, such as those contained in resolutions of the United Nations (UN) Security Council, and in international conventions, such as the International Convention for the Suppression of the Financing of Terrorism, to nonbinding standards established by groups of countries acting in concert, such as the Eight Special Recommendations on Terrorism Financing of the Financial Action Task Force (FATF). While there is considerable overlap among these sources, their scope varies. Implementation of some of the norms and standards requires legislation, but on many points, implementation can be effected in a number of different ways. As a result, in responding to their international obligations and meeting the standards, countries must make a number of choices as to the scope of the legislation and its contents.
The main sources of international obligations in the combating of the financing of terrorism are the Resolutions of the United Nations Security Council, and in particular, Resolution No. 1373 (2001) (hereinafter “the Resolution”) and the earlier resolutions requiring the freezing of assets of listed terrorists, and the International Convention for the Suppression of the Financing of Terrorism (hereinafter “the Convention”). In addition to these formal sources of international obligations, the Financial Action Task Force (FATF) issued a set of eight Special Recommendations on Terrorist Financing (hereinafter “the Special Recommendations”) on October 30, 2001 and invited all countries to implement them and to report to the FATF on their implementation.
Countries that have already legislated to implement the obligations and standards related to combating the financing of terrorism have done so in many different ways. Some countries have enacted comprehensive legislation that deals with many aspects of combating terrorism and its financing, sometimes going well beyond the international requirements. Others have designed legislation to deal with one or a few of these requirements at a time—for example, adopting legislation dealing specifically with the requirements of the Convention, or those of the Convention and the Resolution taken together.
Authorities wishing to implement the provisions of the Convention and to respond to the requirements of the Resolution would need to consider two separate but related types of conduct regarding the financing of terrorism. One is the financing of terrorist acts, as defined in Article 2 of the Convention. The other is the provision of financial support to terrorists and terrorist organizations, as stated in paragraph 1(d) of the Resolution. While the requirements relating to these forms of conduct are similar, they are not identical, and it will be for the authorities of each country to decide in which way each type of conduct will be characterized in local law.109 Before considering the differences between the two requirements, it should be noted that paragraph 1(b) of the Resolution requires the criminalization of the financing of terrorist acts, using language that is very close to that of the Convention. Read with paragraph 3(d), which calls upon states to become parties to the Convention “as soon as possible,” paragraph 1(b) of the Resolution is a clear reference to criminalization of the financing of terrorist acts as defined in the Convention. It would follow that paragraph 1(d) requires something additional to the criminalization of terrorist acts.
Suppressing the financing of terrorism is an ambitious objective, and success will depend on the ability of states to quickly put in place appropriate legislation as well as adequate enforcement mechanisms. For countries that have already adopted the laws and put in place the necessary enforcement mechanisms to deal with money laundering, the additional legislation to address the financing of terrorism is not considerable, but the additional enforcement mechanisms required to successfully detect, and prosecute financing of terrorism cases may be considerable. For countries that lack both legal and administrative infrastructures, the task may well be more daunting. The IMF (together with the World Bank and many regional organizations) has engaged in programs to assess countries’ AML/CFT legal frameworks and to offer technical assistance to countries that wish to bring their legal frameworks into conformance with current international norms and standards in this regard.
Detailed annual data for Fund member governments are supplied on revenue income by source (tax, lending, bonds, etc.), and expenditure by sector (defense, education, health, etc.) for all levels of government (national, state, local). Topics covered include deficit/surplus or total financing, revenues or grants, expenditures, lending minus repayments, domestic financing, foreign financing, domestic debt or total debt, and foreign debt. The Yearbook provides data on budgetary operations, extra-budgetary operations, social security, and consolidated financial operations of central governments. A section of the Government Finance Statistics Yearbook is devoted to a cross-country comparison of data.
This Selected Issues paper analyzes the condition of household, corporate, and bank balance sheets; sustainability of the U.S. external current account deficit; the impact of a slowdown in the growth on the euro area economy; and the implications of the reduction in U.S. treasury securities for monetary policy and financial markets. The study discusses the pros and cons of investing government assets in private securities; the recent changes in agricultural support policy and their impact on other countries; technological innovations and the adoption of new technologies.
Population aging puts significant pressure on social security systems that are based mainly on a pay-as-you-go (PAYG) formula and determined by the political process in which both retirees and future retirees participate. This paper demonstrates that in an economic and demographic steady state, majoritarian democracy overspends on social security. It then shows that in case of demographic shock, the regular majority process can be paralyzed by the development of entrenched interest groups that could lose from majority decisions. Depending on the way these entrenched interests operate, they can be judged more or less desirable from the viewpoint of social justice.
The Chinese pension system is highly fragmented and decentralized, with governance standards, pension fund management practices, their regulation and supervision varying considerably both across the funded components of the Chinese pension system and across provinces. This paper describes the key components of the system, highlights the progress made to date and identifies remaining weaknesses, in regard to information disclosure, the governance framework and pension fund management standards.
Ces dernières années, le FMI a commencé à participer activement aux efforts déployés au niveau international en vue de prévenir l'utilisation abusive des systèmes financiers et afin de protéger et renforcer l'intégrité du système financier international. L'implication du FMI dans ces questions s'est étendue au-delà des mesures contre le blanchiment de capitaux pour y inclure les initiatives visant à réprimer le financement du terrorisme. Ce manuel est destiné à faciliter la fourniture de l'assistance technique nécessaire en fournissant des documents essentiels aux législateurs nationaux chargés de rédiger des lois contre le financement du terrorisme. Il présente les règles et obligations internationales pertinentes, ainsi que des exemples de législation destinés à y satisfaire. Les questions examinées dans le manuel présent un intérêt pour tous les pays, quelle que soit leur situation géopolitique.